There are two different tax credits available for homeowners who make energy efficient upgrades. Credits directly reduce the tax owed and will, therefore, save money. This article provides energy tax credit overview for Waltham MA property owners.
Tax Credit Options
The Wind, Solar, Geothermal and Fuel Cell Tax Credit
This tax credit is good for existing real estate and new construction, if used as principal residences. Investment properties do not qualify. Homeowners may take a credit totaling 30 percent of the cost of improvements completed during the calendar year.
The following items fall into this tax credit category:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
- Fuel Cells (up to $500 for each 0.5 kilowatt capacity; other limits apply)
Energy Efficient Upgrades
This credit covers building materials, insulation, windows, skylights, doors, roofs, air circulating fans, furnaces, and hot water boilers. There are certain requirements for each item, so look up the tax laws prior to taking the credit. There are price restrictions on certain upgrades such as windows. Only repairs to principle residences may be used and and only items lasting 5 years or more may be included. In general, the credit is for ten percent of the purchase price up to a maximum of five hundred dollars. Once a tax payer reaches the five hundred dollars mark, no additional amount may be applied in any future year. This is a lifetime limit and not an annual one.
Energy Tax Credit Overview For Waltham MA Property Owners
With all tax credits, hold on to receipts to verify amounts. Also document the manufacturer and model number of all products since some have additional criteria under the tax laws. If you are not sure about whether your upgrades qualify for this credit or have a lot of credits in your tax return, think about hiring a tax preparer. More energy tax credit overview for Waltham MA property owners is offered at the Energy Star website. The information in this blog was compiled by Bradford Pratt at REMAX on the Charles as is intended only as an introduction.